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Issues: (i) whether reassessment under section 147 read with section 148 could be sustained when no material was shown to exist before recording reasons and issuing notice; and (ii) whether the enhanced stamp valuation could be adopted under section 50C in the absence of any revaluation order or supporting stamp authority record.
Issue (i): whether reassessment under section 147 read with section 148 could be sustained when no material was shown to exist before recording reasons and issuing notice.
Analysis: Reopening of assessment must rest on material in possession of the Assessing Officer which, on objective examination, gives rise to a reasonable belief that income has escaped assessment. Here, the record did not show that any such material existed before the reasons were recorded and notice under section 148 was issued. The later communication obtained during reassessment proceedings could not supply the missing foundation for initiation of reassessment.
Conclusion: The reassessment initiation was invalid and the assessee succeeded on this issue.
Issue (ii): whether the enhanced stamp valuation could be adopted under section 50C in the absence of any revaluation order or supporting stamp authority record.
Analysis: The addition was based only on a communication suggesting enhancement of the property value, but no revaluation order or conclusive record from the stamp authority was produced. The contemporaneous clarification obtained in response to the RTI application stated that no such reference was received and no order was passed on it. In the absence of a completed and supported enhancement by the stamp authority, the revised figure could not be treated as the full value of consideration under section 50C.
Conclusion: The addition under section 50C could not stand and was deleted in favour of the assessee.
Final Conclusion: Both the reassessment and the capital gains addition failed on the record, and the assessee obtained complete relief.
Ratio Decidendi: Reassessment cannot be validly initiated without pre-existing material giving rise to a reason to believe that income has escaped assessment, and a notional or unsupported enhancement of stamp value cannot be substituted under section 50C in the absence of a conclusive revaluation by the competent authority.
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